The latest Absa Homeowner Sentiment Index (Absa HSI) indicates that confidence in the South African property market has reduced by 4%, ending Q2 2021 at 77%.

Respondents who were not confident about the South African property market cited concerns around economic and political instability (up 25% compared to Q1 2021), the high levels of crime and unemployment (up 28% compared to Q1 2021), and land expropriation without compensation making property an uncertain investment.

Collected at the end of June into early July, the results reflect the sentiments of some respondents interviewed at the advent of acts of violence and destruction to property that were seen at the beginning of July 2021.

Salient points:

• Sentiment towards selling property was the only sub index that did not see a reduction against the previous quarter. Respondents continue to believe that you can get a good price for your property (although fewer respondents mentioned this as a driver).
• An emerging theme that came out strong was that of respondents believing that it is good to sell property when upgrading.
• The gap between buying and selling sentiment reduced, given the reduction in buying sentiment (rather than an increase in selling sentiment). This was seen across all respondent segments, except that of respondents who own investment properties – the only respondent group that saw an increase in buying sentiment and reduction in selling sentiment.
• This resulted in an enabling environment for property investors – one where they are bullish while other players are bearish.

 Click here for the Absa Homeowner Sentiment Index Q2 2021 full report 

Sanlam, Africa’s largest non-banking financial services group, and Absa, one of Africa’s largest diversified financial services groups, today announced that they have reached an agreement to combine their investment management businesses in a transaction which will result in an asset management company with assets under management, administration and advice in excess of R1 trillion.

The transaction will see Absa exchange its investment management business, Absa Investments, for a stake of up to 17.5% in Sanlam Investment Holdings Proprietary Limited (SIH). Absa Investments comprises Absa Asset Management, Absa Alternative Asset Management, Absa Fund Managers (excluding the Absa Prudential Money Market Fund) and Absa Multi Management.

SIH is Sanlam’s third-party asset management business which is jointly owned with ARC Financial Services Investments Proprietary Limited (ARCFS). ARCFS currently has a 25% effective interest in SIH through its 25% shareholding in SIH’s holding company, with Sanlam owning the remaining 75%. The combination of SIH with Absa Investments will further strengthen SIH’s position as one of South Africa’s largest black-owned asset managers.

Clients of the combined SIH business will benefit from access to a wider range of investment solutions to meet their financial needs. Increased investment in research and technology will equip SIH with the data and systems to strengthen its industry leadership.

As part of the transaction, Satrix, a subsidiary of SIH, will acquire the exchange-traded funds (ETF) business of Absa’s NewFunds (excluding its commodity ETF business), and the intention is that Absa will enter into agreements to dispose of its market Linked Investment Services Provider (LISP) business to Glacier by Sanlam. The conclusion of agreements to give effect to the LISP transaction is a suspensive condition to the investment management transaction.

Absa will also enter into a 10-year distribution agreement with SIH, meaning the expanded operations will utilise the distribution networks of both Sanlam and Absa, which significantly broadens market reach for the enlarged SIH.

Sanlam Group CEO Paul Hanratty said, “We are delighted to welcome Absa clients and investment management business employees to Sanlam, when the transaction becomes effective. Sanlam prides itself on having a leading investment business at our core to ensure that we can deliver superb returns to all our customers. We are confident that this transaction will strengthen our ability to deliver investment excellence for customers through our ability to further invest in the business.”

“For Absa, the transaction delivers improved scale, capabilities, customer propositions and transformation, all of which we view as essential to achieving growth in the investment management sector,” said Jason Quinn, Absa Interim Group Chief Executive. “The transaction will help us create a deeper, broader range of investment solutions for our clients,” Quinn said.

“There is an exciting complementary nature to the relationship, which we believe will realise value for all of our stakeholders. For our staff, there will be an opportunity to work for a larger world-class, multi-capability investment business,” Quinn further said.

The effective date of the transaction will depend on the fulfilment of certain suspensive conditions including regulatory approvals (such applications will be submitted to the relevant regulators in due course) and is expected to occur in the first half of 2022.

Absa Purchasing Managers’ Index (PMI) increased for the second consecutive month in September. The seasonally adjusted Absa Purchasing Managers’ Index (PMI) stabilised at an elevated level in September. This comes after large swings in the prior two months when several well-documented shocks pushed the PMI sharply lower in July, followed by a robust rebound in August. At 56.8, the headline PMI index declined somewhat in September from the 57.9 points recorded in August. Even with the decline, the September reading was only slightly lower than the average of 57.1 recorded in the second quarter of 2021. However, the average PMI reading for the third quarter was down by 4.4 points relative to 2021 Q2.

In terms of the follow-through to actual Q3 manufacturing production, the business activity sub-index of the PMI is the more appropriate indicator to consider. In this case, the movement in September was starker. After crashing in July and rebounding significantly in August, this index declined by almost 5 points to 53.8 in September. In terms of the quarterly average, the business activity index measured 46.3 points in 2021 Q3, down notably from just more than 55 in the second quarter. The weaker activity levels in 2021 Q3 are in line with the trend in the Absa quarterly manufacturing survey and suggests that the manufacturing sector is likely to be a drag on the quarterly GDP momentum in the third quarter.

The new sales orders index also lost ground in September, albeit less so than the activity component. Indeed, at 59.2, new sales orders remained elevated. There seems to have been some softening in export demand, which would be consistent with the recent cooling in the PMI indicators for the Eurozone and the UK. Even so, respondents continue to expect an improvement in overall business conditions over the next six months.

After softening in July, the purchasing price index increased for the second consecutive month in September. Along with supplier delivery times that lengthened again in September, the rise in input costs may reflect the impact of worsening global supply-side bottlenecks. Looking forward, besides the cost implication of supply and shipping constraints, the much weaker rand exchange rate in the latter part of September and the recent (further) rise in the Brent crude oil price should keep input cost pressures elevated in the foreseeable future.

• PMI September Report 2021
• PMI September infographic 2021

Absa Group Limited, one of the largest diversified financial services providers in Africa, plans to implement a second significant broad-based black economic empowerment (B-BBEE) transaction as part of its broader efforts to achieve transformation in a meaningful and sustainable way.

“The planned transaction is a demonstration of our commitment to transformation and cements our longstanding view and approach of creating inclusive growth in Africa. While it is aligned with the South African government’s B-BBEE objectives and with the commitments contained in the Financial Sector Code, we will also extend the offer to include employees across our operating markets,” said Jason Quinn, Absa Interim Group Chief Executive.

While the transaction is in development, it is currently envisaged that the scheme will hold up to 8% of the Group’s issued share capital, which equates to approximately R9.4 billion, based on the Group’s share price on 20 September 2021, and that it will be broad-based, including third-party investors and staff. The staff component will enable all Absa employees across the Group’s operations to become shareholders and to participate in the Group’s growth.

In 2004, Absa became the first of the large banks in South Africa to conclude a significant B-BBEE transaction, issuing a 10% stake to Batho Bonke Capital. The Batho Bonke empowerment consortium consequently became the second-largest shareholder in Absa. As the Batho Bonke transaction unwound, allowing beneficiaries to sell their shares, South Africans, from community trusts to women’s groups, BEE companies, stokvels and employees, benefited.

Subsequently, as part of its separation from Barclays PLC, Absa announced that it would undertake a new B-BBEE transaction in line with its transformation efforts. Barclays transferred a 1.5% stake in Absa to the Absa Empowerment Trust in 2017. Dividends subsequently received by the Absa Empowerment Trust in relation to those shares have been used to purchase additional shares, resulting in the initial stake increasing to approximately 1.9%. These shares will form part of the new B-BBEE transaction.

The development of the proposed B-BBEE scheme was hindered last year, when the COVID-19 pandemic prompted a sharp economic downturn and unfavourable market conditions.

Full details of the proposed scheme, which will be subject to shareholder and other approvals, will be published once the design has been finalised. The scheme is expected to be implemented in 2022.

“The intention to undertake a new B-BBEE transaction demonstrates Absa’s significant commitment to transformation,” said Quinn. “Meaningful Black participation, including ownership, at all levels of the South African economy, is a national priority to ensure sustainable sociopolitical, financial and economic stability.”

Globeleq, the leading independent power company in Africa, and Absa Bank, a leading financier in the renewable energy programme in South Africa, have completed the senior debt refinancing of three of Globeleq’s renewable power plants. The purpose of the refinancing is to enhance the projects’ capital structures, allowing for the release of value to shareholders and the reduction of the tariff to the national utility, and ultimately consumers in South Africa.

The tariff reductions will save the national utility more than R1 billion across the three assets over the remaining 12-year term of the power purchase agreements. Absa Bank acted as the mandated lead arranger and sole underwriter of the c. ZAR 5.2 billion debt financing package.

This transaction will be the second refinancing of renewable assets under the Department of Mineral Resources and Energy’s (DMRE) Independent Power Producer Office (IPPO) Refinancing Protocol. Globeleq hopes to eventually refinance the entire portfolio of assets it owns in South Africa.

Globeleq proactively engaged in June 2020 after the IPPO requested owners of the South African renewable Round 1-3.5 projects to consider participating in a voluntary refinancing programme and led the refinancing process on behalf of all its shareholders in the 138 MW Jeffreys Bay Wind Farm, 50 MW De Aar Solar and 50 MW Droogfontein Solar plants.

Mike Scholey, Globeleq CEO said “Globeleq sees this transaction as enabling future secondary market debt, which in turn will stimulate new opportunities, jobs and contribute to the economic development of South Africa. We hope that other IPPs will look to do the same and reduce the cost of their power to Eskom.”

Apart from reducing wholesale electricity prices, the refinancing will unlock funds for the shareholders which, in turn, will encourage re-investment in the sector, as well as accelerate equity distributions to the three community trust shareholders, enabling spend on high impact sustainable ventures.

Absa’s Johan Koorts, Resource & Project Finance Principal said “Absa Bank has been a major supporter of the South African renewable energy programme since its inception and has, to date, arranged financing for c. 3 gigawatts of projects across various bid windows. This transaction strongly demonstrates Absa’s ongoing commitment to the financing of clean energy and the acceleration of investments that make a sustainable impact on the communities we serve.”

Bernard Magoro, Head of the IPP Office said: “We wish to thank all parties for the commitment shown and the constructive way in which they approached this refinancing and hope that the successful conclusion thereof will lead to more IPPs taking comfort from the process and coming to the fore to participate in this initiative. The IPPO is proud to be part of this achievement.”

Absa Group, one of the largest financial service providers in Africa, will strengthen efforts to grow its digital partnerships ecosystem across Africa with the appointment of HYBR and SystemicLogic.

“We believe in the substantial mutual value that is created by connecting with key local, regional and global ecosystem networks that have extensive activities on the continent across multiple industries,” says Absa Group Digital Partnerships Ecosystem Lead, Andrew Davies. “HYBR and SystemicLogic’s skill sets and networks will augment our efforts to connect and collaborate with Africa’s innovators and entrepreneurs,” says Davies. 

Absa is looking to work with start-ups that have innovative tech-based solutions which could ultimately be scaled and deployed to benefit its customers.

An Absa Digital Partnerships capability was established in 2020 with support from global collaborator Elixirr to create the strategy, operating model and execution capabilities to collaborate effectively with innovative, mature start-ups from around the world. This capability has enabled Absa to set up, mobilise and deliver a digital partnerships ecosystem through which the Group now continuously sources collaborators to innovate with and rapidly co-create new value propositions and capabilities that align to business objectives.

With a notable combined reach, the three scouting partners boast networks and memberships within the African and global start-up environments.

“Our collaboration with Absa Group is a long time coming, having been exposed to Absa’s work in the innovation ecosystem across Africa over the past five years,” says HYBR partner Vuyisa Qabaka. “We’re looking for companies with which to build solutions to align with the Bank’s ambition to deliver financial impact that improves lives,” says Qabaka. HYBR is a scale-up advisory firm with offices in both West Africa and Southern Africa.

SystemicLogic is actively involved in contributing financial and mentorship support to various networks and individuals in several markets.

“Every entrepreneur needs someone to believe in them, and there is no successful business that scaled without some involvement from a trusted financial partner,” says SystemicLogic CEO Audrey Mothupi. “We’re thrilled to be able to continue working alongside the bank and offering opportunities to other companies like ours,” says Mothupi.

Absa is looking to accelerate its digital transformation through strategic partnerships which collectively form an ecosystem that will deliver improved customer experience, reduce costs and support revenue growth.

“We believe strongly in the power of open innovation and true value exchange between large corporates and startups,” say Chris Weiss, Partner at Elixirr. “Absa’s Digital Partnership capability ensures that they are able to effectively engage with potential partners to define what the value exchange will be, setting both parties up for longer term success. We are proud to have supported Absa on this journey and look forward to great things from our continued relationship.”

“We will be focusing on establishing a meaningful exchange of value between Absa and future ecosystem members, as well as our scouting partners – for the benefit of all involved, and the ultimate benefit of our substantial customer base,” says Davies. Davies invites interested organisations to make contact with Elixirr,  HYBR or SystemicLogic.

Absa continues KKNK support with unique virtual experiences

• To view and participate in this year’s KKNK, click here.  
• To visit the Virtual Absa Kuierkamer, click here and follow the quick registration process for access.
• Click here for an overview and virtual walk-through of the unique Virtual Absa Kuierkamer platform.
• To visit the Absa KKNK Virtual Art Gallery, click here.  

Absa remains committed to supporting the arts through its ongoing sponsorship of the renowned Klein Karoo Nasionale Kunstefees (KKNK). The annual arts festival has historically taken place in the Karoo town of Oudtshoorn and for its 2021 edition, the bank has added a virtual flavour to the festivities.

The festival, which was temporarily put on hold last year due to the ongoing COVID-19 pandemic, will see Absa celebrating 16 years as a proud sponsor.

This year’s event will see Absa bringing innovations that will extend the reach of the festival beyond its usual territories, in the process introducing new audiences to the festival. The festival is held virtually and will be spread over three months, until November 2021.

Absa, as a purpose-led organisation, will continue to bring the possibility of arts and artists to life through a series of virtual engagements, activations and talks during the festival period.

Absa Senior Specialist Art Curator, Dr Paul Bayliss, says that the global COVID-19 pandemic has radically impacted many industries, and the arts industry is no exception. The pandemic has allowed Absa to advance its digital art presence to make visual arts more accessible to diverse audiences.

“As a Group, we saw an opportunity to launch the Absa Art Hotspot, where we could host our art exhibitions, masterclasses and art auctions virtually as well as migrate certain elements of our art-related sponsorships and partnerships to online platforms. We are leading the charge in being digitally progressive in the visual arts,” he says.

“With our KKNK partners, we agreed to extend the Absa Art Hotspot to include the festival. Our virtual platform – the Virtual Absa Kuierkamer – mimics aspects of the host town of Oudtshoorn and will see us rolling out numerous online activities where visitors will be given access to a variety of multimedia content.

Our events will be scattered around the town and art lovers will be able to explore various landmarks and buildings, just as they would have done during the live festival. The platform boasts a host of unique interactive features, including a virtual art gallery, sculpture installation and even a digital guestbook. All of this functionality is hosted by a web-based application, allowing for a seamless desktop and mobile experience,” Bayliss adds.

The KKNK virtual gallery, also supported by Absa, opened earlier in the year with an exhibition titled “Emotion”. Hosted by the Absa Gallery, and curated by Dr Bayliss, the exhibition features bespoke artworks designed for the digital platform by previous Absa L’Atelier entrants.

One of the virtual experiences that will be hosted on the Virtual Absa Kuierkamer is a series of art documentaries titled “Beyond the Canvas”. The documentaries will focus on themes that have an impact on the South African visual arts landscape. The themes range from technology, social media, tourism, and graffiti, to recycling and food in relation to the visual arts and will include both local and international guests sharing their thoughts and experiences.

“As a financial institution, we agree that the growth that we want to achieve is inextricably linked to our firm commitment to be an active force for good in the communities in which we operate. The arts afford us the opportunity to play a shaping role in society by supporting fledgling as well as more established artists, through honing their skills, and stimulating the economy at large. We will use this year’s art documentaries and business talks to authentically speak about some of the more pertinent issues affecting not only the arts, but also the communities that we serve,” he says.

In addition, a series of six Business Talks will be hosted by Absa’s Retail and Business Banking division (RBB) over the three-month period and will also see numerous guests invited to partake in conversations to find solutions to some of the country’s pressing questions.

“Absa Relationship Banking is proud to be collaborating with the KKNK virtual festival by sharing relevant insights and valuable information pertaining to some of the business sectors on which we focus. Alongside industry specialists and business partners, we will be unpacking the sector landscape and its growth prospects during this disruptive time in our history. We will hear from Justin Schmidt on renewable energy and manufacturing, James Noble will shed some light on the world of franchising, while Abrie Rautenbach will look at what’s trending in agribusiness. Fiks Dlamini will focus on opportunities in the public sector landscape and Kgalaletso Tlhoaele will home in on the importance of enterprise development, all of which contribute to the sustainability of our country at large,” said Bayliss.

Another content-led initiative that will be driven by the bank during this period is the Coffee Table Talks with award-winning presenter, Hannes van Wyk, popularly known as the Koffietafelgesprekke. The talks will cover topics such as the impact of COVID-19 on the arts and entertainment industries, as well as look at what the future may hold for the entertainment and arts industry.

The public will be able to access the talks once the Virtual Absa Kuierkamer goes live on 1 September 2021.

Activities in the Virtual Absa Kuierkamer will run from September 2021 until the end of November 2021. Content on the platform will be updated on a regular basis.

Absa Group, in collaboration with the Hein Wagner Academy, will be launching South Africa’s first Cybersecurity Academy for the visually impaired. This is the next evolution of the Absa Cybersecurity Academy, which is focused on developing marginalised, unemployed youths in a globally scarce skill.

Accepted students will receive a full scholarship to the Absa Cybersecurity Academy for the Blind based in Worcester, Cape Town, covering all fees, from tuition, specialised learning technologies, accommodation, to food and travel expenses. Each student will also receive a monthly stipend during the two-year programme.

“This programme is part of our effort to expand the net of socio-economic inclusion for bursaries, especially to those living with disabilities who are so often underserved,” says Manoj Puri, Interim Chief Security Officer at Absa.

“It is also aligned with our skills development strategy, which aims to build a scarce and critical capability and we hope that candidates are as excited about the prospects that this programme offers as we are,” he adds.

“We commend Absa for collaborating with us in forwarding our mission to enable those living with visual loss to lead independent lives by providing specialised training that will allow them to integrate into the workforce and reach their full potential,” says Hein Wagner, founder of the Hein Wagner Academy.

“This partnership will result in highly trained cybersecurity specialists. In year one, we give them a strong technical foundation with three international certificates: A+, N+ and S+, over and above a national qualification and a great deal of focus on personal mastery/soft skills. In the second year, students learn to code in Python (a gateway to many future opportunities), CCNA DevNet (Agile) and CCNA Cyber Operations, which qualifies them as Cybersecurity Analysts. Their learning is steeped in personal mastery, and ready-to-work programmes.”

Bursary recipients will be selected based on academic performance and financial need. Applicants must satisfy the following entry requirements.

Applicants must:

• be previously disadvantaged
• be sight-impaired (blind / visually impaired)
• have Matric or Matric-equivalent certificate and acquired at least 50% in English
• be computer literate with typing skills and screen reader experience
• be aged 18 to 30
• not be part of/previously been selected for a formal learnership/internship programme 
• be able to relocate to Worcester, Western Cape for the duration of the programme.

Candidates who meet the above-mentioned criteria will then complete a rigorous selection process, after which they will be notified if they have been selected.

Applicants can send their applications (a covering letter, CV and a transcript of their Matric results or highest college qualification) to training@heinwagneracademy.org before 3 September 2021.

Absa is set to continue its role of shaping the visual arts landscape in South Africa when it hosts an exhibition titled Remnant from Thursday, 26 August 2021.

The exhibition will explore residual remnants of human existence, playing on the title of the exhibition itself and will be hosted on the Absa Art Hot Spot platform.

Remnant will highlight artworks from two of South Africa’s most promising artists Kirsten Eksteen and Asanda Kupa.

Eksteen hails from Grassy Park in the Cape Flats and will be presenting 10 artworks ranging from installation to linen-based canvasses. The 26-year-old sees the exhibition as an opportunity to introduce her unique style of art to the country.

“During the 2018 Absa L’Atelier Art Competition, I won a merit award that allowed me to take up a one-month residency in New York. During my time there, I discovered that art comes from an artist and, therefore, the artist is part of the artwork they produce,” she says.

“For this exhibition, I will be showcasing work such as my steel wool suit which I designed and wore until it was moulded to my body shape. This is a personification of the idea that the artist is part of the work they produce,” she adds.

Asanda Kupa, who is 42 years old and hails from the Molteno in the Eastern Cape, says he was born to be an artist.  For him, this exhibition serves as a reminder of the most topical issues in the country; namely, land ownership.

“Historically, my art has always shown the movement of people. This time around, my work showcases the movement of people without the physical presence of people therein,” he says.

“I also touch on the contested issue of land through some of the works. I deal with the issue of land ownership and whether the land belongs to us or whether we belong to the land?” he adds.

Absa Senior Specialist Art Curator, Dr Paul Bayliss, says the newly launched Absa Art Hot Spot allows Absa to continue making possibilities a reality for artists from across the African continent even during the on-going Covid-19 pandemic, which has restricted art lovers to limited physical gatherings.

“The Absa Art Hot Spot allows us to keep positively impacting the broader visual arts community by identifying, nurturing, and supporting fledgling as well as more established artists and providing continual education around the visual arts. This is exemplified by the artists we have chosen to showcase at the Remnant Exhibition. Asanda and Kirsten are uniquely gifted creatives whose portfolios and personal backgrounds are totally distinct from one another. However, it is their differences which make their upcoming collaboration even more authentic and engaging. It is by honing the artists’ skills and creating platforms such as this that we can ignite the creative economy on the African continent,” he says.

Remnant will be live for viewing on the Absa Art Spot from 26 August until 31 December 2021. Art lovers can view the exhibition here.

*Salient points

• Revenue increased 3% to R41.2 billion
• Operating costs rose 5% to R22.6 billion
• Cost-to-income ratio increased to 54.9% from 53.9%
• Pre-provision profit increased 1% to R18.6 billion
• Impairments fell 68% to R4.7 billion 
• Headline earnings per share increased to 1 019.7 cents from 173.6 cents
• Return on equity improved to 15.3% from 2.6%
• Group CET 1 ratio of 12.4%, well above regulatory requirements
• Dividend payments resumed

*Note: Normalised values are reflected (stripping out the effect of the separation from Barclays PLC)

16 August 2021

Absa Group Ltd., one of Africa’s largest financial services providers, reported an increase in interim earnings and resumed dividend payments as the economic effects of the pandemic eased in the first half of 2021 compared with the same period a year earlier.  

Group headline earnings grew five-fold to R8.6 billion, which is higher than pre-pandemic levels, supported by resilient pre-provision profit growth and a significant decline in impairments. While earnings increased strongly, the improvement is off a low base a year earlier. Absa generates most of its income from its operations in South Africa.

“These results are testimony to the decisions that we took during the crisis around supporting our customers and taking a cautious approach to preserving capital and liquidity,” said Jason Quinn, Absa Interim Group Chief Executive.

The Group further strengthened its capital reserves during the period and maintained a strong liquidity position in the first half.

“Pleasingly, our headline earnings exceeded pre-COVID levels and our common equity tier 1 capital ratio strengthened further to the top end of our target range,” said Punki Modise, Absa Group Interim Financial Director. “The Group’s balance sheet remains resilient and returns are now above cost of equity.”

The recovery was broad-based as all business units reported strong growth from a low base in the prior year.

Retail and Business Banking (RBB), which generates most of the Group’s income, grew headline earnings eight-fold to R4.2 billion. The benefit of a lower impairment charge was partially eroded by a 15% decline in pre-provision profit, given high claims and reserving in the life insurance business and customer-centric fee reductions. RBB has invested heavily in digital and has made considerable progress in this area, including launching Apple Pay recently.

Corporate and Investment Banking (CIB)’s headline earnings more than doubled to R4 billion, driven by solid growth across the franchise, most notably in the Global Markets business and the Investment Bank. This helped to offset low credit appetite from corporate clients.

The Group refined its operating model after an internal and external review found that the Group structure was sub-optimal relative to its growth ambitions and the scale of the opportunity across the continent. The major reporting units, RBB and CIB, will be accountable for their product lines across the continent, complemented by a strong, focused and lean ARO central capability and fully enabled country leadership teams.

Absa continued to play a role in society this year, building on last year’s substantial efforts to support customers, staff, communities and stakeholders in difficult times.

“Absa’s response to the pandemic and more recent incidents in South Africa has continued to be comprehensive, compassionate and reflective of the best of Absa’s values,” said Quinn. 

Absa announced R500 million of pricing relief for customers in South Africa in February and reinstated its Siyasizana payment relief programme in August to assist retail customers (individuals) with existing credit facilities after they were impacted by unrest and looting in July. Absa extended tailored credit solutions to business banking customers and made donations totalling R12.5 million to assist with immediate needs such as food relief and infrastructure restoration in affected areas.

Absa made significant progress in a number of key areas during the reporting period, including in sustainability. Absa published its first Task Force on Climate-related Financial Disclosures (TCFD) report in March and it was the first South African bank to announce sustainable finance targets. The Group aims to finance or arrange more than R100 billion for environment, social and governance-related projects by 2025.

Outlook

Absa foresees a number of risks to the Group’s growth forecasts in the remainder of the year and recognizes that the impact of COVID-19 remains a significant uncertainty.

Absa currently expects the South African economy to grow 4% this year from last year’s 7% decline, a slightly improved outlook compared with the 3% growth forecast in March.

“We are now confident, in hindsight, and considering the improvements in our financial momentum, that most of the key strategic calls made in 2018 were good decisions, which have been delivering against and which and remain very relevant today,” said Quinn. “It’s also clear that much opportunity still remains and the management team has a strong sense of urgency around re-anchoring and refreshing our strategy against the latest market context and executing against our priorities including making further and deliberate progress on our culture journey.”